The Gift That Keeps on Giving: Tax-Efficient Strategies for Holiday Gifting

The holiday season is a time for generosity — but it can also be an opportunity to make smart financial moves. Thoughtful gifting isn’t just about spreading cheer; with the right approach, it can also reduce your taxable estate, shift wealth to the next generation, and even save on capital gains.

If you’re planning year-end gifts, here are a few tax-efficient strategies to consider for 2025.

🎄 The $18,000 Annual Exclusion

Every individual can give up to $18,000 per person (2025 limit) without triggering gift tax reporting. Married couples can combine their exclusions, meaning you and your spouse could gift $36,000 to each child, grandchild, or other individual.

These gifts don’t count toward your lifetime gift and estate tax exemption, and they’re completely tax-free for the recipient. That makes them one of the simplest and most effective tools for reducing the size of your taxable estate while supporting loved ones.

🏦 Using Trusts for Long-Term Giving

Sometimes you want your gift to do more than cover short-term expenses — you want it to last. That’s where trusts come in.

Placing gifts into a trust can:

• Provide structure and protection for younger beneficiaries.

• Allow you to set conditions for how and when funds are used.

• Keep assets shielded from creditors or divorce.

Certain trusts, like irrevocable gift trusts, can also help you remove appreciating assets from your estate, locking in today’s values for tax purposes while giving future growth to your beneficiaries.

📈 Gifting Appreciated Stock

Another powerful strategy is to gift appreciated securities instead of cash.

Here’s why:

• If you sell the stock yourself, you may owe capital gains tax on the appreciation.

• If you gift the stock directly, your recipient assumes your cost basis and can decide when to sell.

• If your recipient is in a lower tax bracket, the overall tax hit could be far less than if you sold it.

This approach can be especially valuable if you’ve held stock for many years and want to transfer both the value and the future appreciation outside your estate.

The Lucrum Bottom Line

Holiday gifting is about more than generosity — it’s also about strategy. By taking advantage of the annual exclusion, leveraging trusts, and considering gifts of appreciated stock, you can make your gifts work harder for both your loved ones and your tax plan.

At Lucrum Legal Accounting™, we specialize in helping attorneys and entrepreneurs find tax-smart ways to transfer wealth while protecting what matters most.

Before you wrap those checks or transfer those shares, let’s talk. A little planning now can ensure your gift keeps on giving for years to come.